The new “bipartisan” debt plan President Obama praised this week would spell disaster for the economy and actually hit the American middle class the hardest by stripping away cherished tax breaks on health insurance, home ownership, charitable giving and retirement savings. The AP reports:

The plan would simplify the tax code by reducing the number of tax brackets from six to three, lowering the top rate from 35 percent to somewhere between 23 percent and 29 percent. That could provide a windfall for wealthy taxpayers because the 35 percent tax bracket currently applies to taxable income above $379,150.

To help pay for lower rates, the plan would reduce popular tax breaks for mortgage interest, health insurance, charitable giving and retirement savings. Other tax breaks would be spared, including the $1,000-per-child tax credit and the earned income tax credit, which helps the working poor stay out of poverty.

As much as I hate the progressive tax system and favor tax cuts, paying for them by punishing homeowners doesn’t seem like a good idea. You think the housing market is bad now? How many homeowners will be able to keep their home without being able to deduct their mortgage interest — an expense they figured into the purchase of their home?

While we’re at it, why don’t we disincentivize donations to charitable organizations? Government will take care of everything…

About 35 million households claimed the mortgage interest deduction in 2009, and about 36 million households claimed deductions for charitable contributions, according to the Joint Committee on Taxation, the congressional scorekeeper on taxes.

Perhaps even worse than these facts, the Gang of 6 plan essentially bows to Democrats’ demands and punts meaningful entitlement reform further down the road. The Heritage Foundation’s David Addington has more on this here.

The Senate’s Gang of Six is made up of Republicans Tom Coburn of Oklahoma, Mike Crapo of Idaho and Saxby Chambliss of Georgia and Democrats Kent Conrad of North Dakota, Mark Warner of Virginia and Dick Durbin of Illinois — you know, just in case you want to call their offices to share your own opinion of this plan. ::nudge, wink::

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